Most U.S. banks with under $10 billion in total assets managed to increase their loan portfolios quarter over quarter as of March 31, with much of the growth driven by real estate activity.
Excluding Paycheck Protection Program loans, community banks reported gross loans and leases of $1.889 trillion in the first quarter, a 1.3% increase from the fourth quarter of 2021, according to S&P Global Market Intelligence data. Loan balances were also up by 0.6% to $1.906 trillion when including PPP loans.
Largest community banks see biggest loan growth
Excluding PPP, loans increased the most — by 2.4% — at bigger community banks, or those with total assets of $3 billion to $10 billion. On the other hand, loans decreased at the smallest banks, or those with less than $100 million in total assets.
For the $3 billion to $10 billion group, commercial real estate and multifamily loans boosted portfolios, while commercial and industrial activity slowed further and consumer loans barely picked up. CRE loans increased by 2.5%, while multifamily loans rose by 2.7%.
Although banks in the $100 million to $3 billion asset size category similarly saw more CRE lending, multifamily loans declined by 0.7%. C&I and consumer lending activity also continued to drag on growth quarter over quarter.
C&I lending down nationwide
The decline in C&I and consumer loans was apparent nationwide, with the steepest drops seen in the mid-Atlantic, which is tied with the West and the Southeast as the best performing region in terms of overall quarterly loan growth excluding PPP loans. C&I and consumer loans in the mid-Atlantic were down 6.3% and 2.2%, respectively, offsetting an increase in real estate lending.
Across the country, consumer loans did not decrease as much as C&I did but continued on their downward path during the quarter.
20 largest banks mostly post loan growth
Among the 20 largest U.S. community bank by asset size, 15 reported a quarter-over-quarter increase in gross loan balances.
Two of these banks, Capitol Federal Savings Bank in Kansas and Luther Burbank Savings in California, no longer have any remaining PPP loans, the payoffs of which have tended to slow net loan growth for many lenders in past quarters.
Meanwhile, Fort Lee, N.J.-based Cross River Bank had $4.06 billion in PPP loans outstanding as of March 31, the most in the group.
